Examination 4 Created on May 11, 2021 AICACC Examination Entrance into our program requires that you pass this exam. Good luck! 1 / 20 A low Return on Investment Ratio (ROI) indicates Check 2 / 20 Journals are also referred to as Check 3 / 20 What is an engagement letter? Check 4 / 20 Which of the following statements is correct regarding a shareholder’s right to inspect corporatebooks and records? The right Is absolute. Is conditioned upon the demanding shareholder owning at least $5,000 worth of stock. Requires that the demand to inspect be for a proper purpose Exists only when fraud or illegality is alleged. 5 / 20 On January 1, the partners' interest in capital, profits, and losses of Studio Partnership were:Partners PercentagesRoss 15%Stone 35%Taylor 50%On April 9, Stone sold his entire interest to Taylor. For tax purposes, which of the following statements iscorrect regarding Studio's status as a partnership? Studio terminated as of January 1. Studio terminated as of April 9. Studio terminated as of December 31. Studio did not terminate 6 / 20 Which of the following financial instruments may be considered a derivative financial instrument? Option contract. Municipal bond. Bank certificate of deposit. Money market fund. 7 / 20 Corbet Co. purchased a copyright near the beginning of the current year from an author for $20,000.The legal life of the copyright is equivalent to the life of the author plus 50 years. Corbet expects tosell the book for five years. What amount should Corbet report as amortization expense related to thecopyright at the end of the current year? $0 $400 $500 $4,000 8 / 20 Goll Co. has a 25% interest in the common stock of Rose Co. and an 18% interest in the commonstock of Jave Co. Neither investment gives Goll the ability to exercise significant influence over eithercompany's operating and financial policies. Which of the two investments should Goll account forusing the equity method? Both Rose and Jave. Rose only. Jave only Neither Rose nor Jave 9 / 20 Smile, Inc. purchased a computer on May 1, for $12,000 with an estimated salvage value of $1,500and a 3-year life. What is the depreciation expense for the year ended December 31, using thedouble-declining method of depreciation? $8,000 $7,000 $5,333 $4,667 10 / 20 Which of the following is an essential element of the audit trail in an electronic data interchange (EDI)system? An integrated test facility that verifies the accuracy of data. A heuristic program that accesses remote locations. Hardware security modules that store sensitive data. Computer activity logs that indicate failed transactions. 11 / 20 Darv Co. had a current ratio of 3-to-1 and a quick ratio of 1-to-1. Current liabilities were $322,000.What was the total amount for inventory and prepaid expenses? $322,000 $644,000 $966,000 $1,288,000 12 / 20 A company sells DVD players for $200 per unit. The players have a unit variable cost of $160. Thecompany estimates that it will sell one home entertainment system for every four DVD players sold.Home entertainment systems have a unit variable cost of $460 and sell for $600 per unit. Thecompany's fixed costs are $90,000. Assuming that the sales mix estimate is correct, how many DVDplayers need to be sold for the company to break even? 300 500 1,200 1,500 13 / 20 Star Co. is a retail store specializing in contemporary furniture. The following information is taken fromStar's June budget:Sales $540,000Cost of goods sold 300,000Merchandise inventory–June 1 150,000Merchandise inventory–June 30 180,000Accounts payable for purchases–June 1 85,000Accounts payable for purchases–June 30 75,000What amount should Star budget for cash disbursements for June purchases? $260,000 $280,000 $320,000 $340,000 14 / 20 What is an opportunity cost? Check 15 / 20 The expected selling price for a new product is $19.00. Management's goal is to obtain a 20%contribution margin on all sales. If the new product has variable selling and distribution costs of $3.00per unit, what is the product's target variable manufacturing cost? $12.20 $12.80 $15.80 $18.20 16 / 20 What is a selling price? Check 17 / 20 A 20% target contribution margin is set for Duct, which is a new product with the following unit costs:Manufacturing costsVariable $12Fixed 8Selling & admin. CostsVariable $3Fixed 5What is Duct's target selling price? $18.00 $18.75 $25.00 $33.60 18 / 20 Which of the following factors most likely would be considered an inherent limitation to an entity'sinternal control? The ineffectiveness of the entity's audit committee Collusion of employees in circumventing internal controls. The lack of resources to monitor internal controls The complexity of the entity's electronic order processing system 19 / 20 Describe risk analysis Check 20 / 20 A compilation of financial statements in accordance with Statements on Standards for Accounting andReview Services is limited to presenting Accounting data that conforms with a special purpose framework other than GAAP. Unaudited financial statements that omit substantially all required GAAP disclosures. Information in the form of financial statements that is the representation of management. Supplementary financial information that has been subjected to inquiry and analytical procedures. Your score is The average score is 0% LinkedIn Facebook Twitter VKontakte 0% Restart quiz